Stampede as savers hunt for the best deals

With the base rate plunging to a 57-year low last week, the stampede is on for saversto grab the last of the attractive rates from lenders.

Panic-stricken income seekers – whose fears have been made worse by predictions that rates could sink to zero per cent at some stage next year – have besiegedbank websites, call centres and branches to secure generous savings deals before they are withdrawn following Thursday’s cut.

The most popular deals are fixed. Banks predict that sharp-eyed depositors will move hundreds of millions of pounds of savings into fixed-rate deals this weekend.

Industry experts say the amount of money on the move from bank to bank could hit a record. Some sources suggest the sums could run into an astonishing tens of billionsof pounds.

The most popular fixed-rate accounts are at risk of being suddenly withdrawn because institutions offer advertised rates to raise only a limited amount of funds.

The better the savings rate, the more money is attracted – and the quicker the deal disappears.

Savers are already struggling to cope with the fact that just over a month ago it was possible to secure a fixed-rate savings product at an interest rate of more than seven per cent.

Today that has fallen to five per cent – and even these are disappearing fast.

Millions of savers will struggle to achieve a real rate of return after the latest base rate cut, even though banks are keen to attract personal savings as the wholesale money market from which they have been borrowing substantial sums in recent years has practically dried up.

One banker says: ‘Account flows were governed by fear earlier this year as depositors fled from failing banks, but now flows are governed by greed as savers turn their gaze back to returns.’

But for millions of savers survival is the key. Once tax and inflation are taken into account, the future looks bleak for those who rely on interest from deposits, particularly retired savers. Basic-rate taxpayers need a 5.25 per cent rate from savings to beat tax and inflation while higher-rate taxpayers need a gross rate of seven per cent.

Financial Mail’s Best Rate For Your Money in our Stats Station publishes best-buy rates only where the institution has given an assurance the rate shown will be available at least until the day after publication.

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For while improved transaction systems mean that in some cases money can move from one institution to another in a click, most transactions are ‘queued’ and executed the following day. In recent chaotic times this has meant some deals can disappear before savers’ money has transferred.

David Black of Defaqto, the research company that compiles our lists, warns: ‘Given the size of recent base rate cuts, and extreme demand from savers, there can be no guarantee on how long rates will remain available. Act quickly.’

In such exceptional circumstances, Financial Mail carries an additional table. This shows best rates for a range of popular accounts provided by familiar building societies and banks.

Though most of these deals are available in branches, it is better for savers, where possible, to apply as soon as possible, so we have included phone numbers.

The table excludes internet-only deals and products from overseas banks where depositor protection is not as robust as with UK institutions.

Big banks with High Street networks do not feature in the table because they are not offering attractive savings rates.